Investments to see boom time in 2013

By Farah Wahida:

More investments are expected to flow into Malaysia in 2013 given the number of ongoing and upcoming projects, according to Frederico Gil Sander, World Bank Senior Economist for Malaysia.

Majority of these projects are from the property, infrastructure, as well as oil and gas (O&G) sectors.

“Notable projects in the O&G sector include the RM60 billion Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor and the RM3.8 billion Sabah Oil and Gas Terminal (SOGT) in Kimanis.”

Moreover, progress of various property and infrastructure projects such as the RM26 billion Tun Razak Exchange (TRX), the RM4.45 billion Second Penang Bridge and the Mass Rapid Transit (MRT) project will also encourage investors to invest more.

“These investments are directly and indirectly linked to the structural increase in commodity prices over the past six or seven years. The challenge for Malaysia going forward is to ensure investments in non-commodity sectors, such as manufacturing and knowledge-intensive services, also pick up,” he noted.

“With respect to portfolio investment, we expect these flows to remain volatile as they depend on the sentiment of foreign investors, which is likely to shift as countries approach and turn back from various policy cliffs. For example, the United States fiscal cliff or the debt overhang issues in the Eurozone.”

Nonetheless, Malaysia is expected to remain an attractive destination for overseas investors in the long-term due to its potential for higher-than-average growth.